Startup pitch: Klook has high ambitions for tours and activities in Asia
Klook was devised as a curated platform for local travel activities and with Asian travellers in mind.
Founders of the Hong Kong-based startup are a couple of former investment bankers, Eric Gnock Fah and Ethan Lin, and technology engineer, Bernie Xiong.
The trio noticed how easy it was to book flights and hotels in the region while itinerary planning and things to do were far less straightforward.
The team has grown to 20 members of staff across Hong Kong as well as regional offices in Shenzhen and Taipei with expertise in various sectors including travel, finance, technology, digital marketing and publishing.
Klook was initially self-funded but completed a US$1.5 million seed round in February led by Tencent senior vice president Xiaoguang Wu.
The startup is going after a piece of a $125 billion “tourist attractions”, market as estimated by Euromonitor, and, of which, the Asia Pacific region accounts for about a third.
According to Klook, rivals for attention in the space mostly cover western destinations and cater for western travellers and online penetration in tours and activities remains quite low.
The startup focuses on Asian travellers and is planning concepts such as exclusive deals and instant ticketing to help set it apart from the rest.
Klook follows a commission model of between 15 and 25% on activities booked.
What problem does the business solve?
Industry problem no.1:
Fragmented and largely offline, hence individual operators often do not have resources to spend on marketing or technology
With a full suite of in-house content management and reservation systems, operators can now showcase the unique experiences and services they have to offer online. For travellers, this means a central hub to accomplish the last leg of their planning
Industry problem no.2:
Lack of price transparency due to multiple layers of distribution in the traditional travel activities space
Connect directly with local operators to negotiate exclusive deals that offer significant discounts to travellers. Thanks to direct partnerships, we can also better vet their services
Industry problem no.3:
As mobile usage gains in popularity, spontaneous booking is critical but instant confirmation is hard to achieve
We are the first to enable instant ticketing to some of the most popular attractions in Asia, particularly in Hong Kong and Singapore, enabling travellers can book till the last minute and show up right away
How did the initial idea evolve and were there changes/any pivots along the way in the early stages?
The initial idea was to set up a site where travellers can explore and book before they depart, which is still very relevant.
But, we quickly realized that there’s still a good percentage of travellers who don’t like planning and would decide on-the-go. As such, we believe mobile will be a game changer for this sector as in fact, unlike flights and hotel bookings, travel activities can be booked when at the destination.
We continue to put a lot of effort in to providing the best user experience on desktop but Klook is proud to launch Asia’s first travel activities app available both on iOS and Android. A week into soft launch, Klook’s iOS app got featured by Apple Appstore as “Best New Apps” across 14 countries in Asia for three consecutive weeks.
Why should people or companies use the business?
It’s the convenience of a one-stop-shop for booking all your things-to-do in Asia as well as:
- Unbeatable prices with our exclusive deals that offer up to 50% discount
- Hassle-free with instant ticketing and mobile vouchers to some of the most well-loved attractions – travellers can literally book and show up in a matter of seconds
- Worry-free with our travel curators carefully handpicking experiences and vetting local operators
What is the strategy for raising awareness and the customer/user acquisition (apart from PR)?
Given Klook is a positioned in a niche sector, we are complementary to many existing large travel companies. In addition, recent investment from Xiaoguang Wu of Tencent brings great strategic value in form of potential collaboration.
Tencent’s leading position in China is unquestionable but the tech giant is also very active in other regional markets with the likes of Wechat, iPick, Joox. We are keen to explore collaboration opportunities
Mobile push focused on travellers on-the-go with imminent need to book activities
Where do you see the company in three years time and what specific challenges do you anticipate having to overcome?
In three years time, Klook will be the go-to-platform to book all sorts of fun things-to-do globally, with Asian travellers in mind.
The specific challenge we anticipate is mainly getting more brand recognition as marketing in the travel industry is indeed quite expensive.
Strict quality control of unstandardized services provided by local operators as volume picks up is also key.
What is wrong with the travel, tourism and hospitality industry that it requires a startup like yours to help it out?
The travel activities space is largely fragmented and offline but consumers are moving online/mobile – there’s clearly a gap in matching demand and supply.
There is an overwhelming amount of unorganized information in travel itinerary planning – Klook provides a curated selection of activities matching varied interests so travellers can easily make a choice.
Exclusive deals/flash sales have been popular with flights and hotel packages, but travel activities have been left out. Klook is the first to bring this “exclusive deals” concept to travel activities so travellers no longer pay “tourist prices.”
The reason why there’s no price transparency with travel activities is due to the many layers of distribution traditionally – Klook now connects directly with local operators to get the best deals.
What other technology company (in or outside of travel) would you consider yourselves most closely aligned to in terms of culture and style… and why?
We are particularly fond of Airbnb’s emphasis on exploration and connecting with locals. Our motto is to uncover unique experiences for travellers so any “trips” become a “journey of discovery.”
Which company would be the best fit to buy your startup?
Describe your startup in three words?
Yours to Explore.
Klook seems like a well thought through startup which aims to find a solution to an industry challenge as opposed to a solution looking for a problem as is the case with so many newcomers.
The company has looked at the challenges of the tours and activities market in terms of fragmentation and distribution and is preparing itself to address them.
The way forward won’t be easy but focusing on Asia as a market will help as will the expertise the team brings with it from various sectors.
The focus on more experiential-type, more adventurous tours should also work well for the startup.
Selling tours in-destination via mobile is a clear growth area and one which no one has cracked yet especially the idea of last-minute allocation.
If Klook can really build up that inventory of up-to-the-minute availability, it will be on to something.
Getting small local tours providers to be able to offer their content electronically will be a challenge as will changing the mentality of “tourist prices” versus discounted offers and the flash sales model.
That said, the startup has much going for it – support from a Tencent executive, ambitions in a market that is red hot right now and being closely watched by online travel giants and a team with experience in many sectors.
Linda Fox is deputy editor for Tnooz. For the past eight years she has worked as a freelance journalist across a range of B2B titles including Travolution, ABTA Magazine, Travelmole and the Business Travel Magazine.
In this time she has also undertaken corporate projects for a number of high profile travel technology, travel management and research companies.
Prior to her freelance career she covered hotels and technology news for Travel Trade Gazette for seven years. Linda joined TTG from Caterer & Hotelkeeper where she worked on the features desk for more than five years.